unit 1

Question 1

what are the business objectives

Answer 1

profit
growth
survival
cash flow
social obj
ethical obj

Question 2

what is a mission

Answer 2

a business’s overall purpose or main corporate aims

Question 3

what do mission statements do

Answer 3

make all stakeholders aware of what the business does and why
tells you the purpose, value, standards and strategy of the business

Question 4

what do mission statements give staff

Answer 4

a sense of shared purpose and encourage them to work towards common goals
cooperation of staff makes it more likely a business wil achieve its aims

Question 5

business objectives

Answer 5

to enable them to achieve their mission
objectives turn the overall aims of a business into specific goals that must be met

Question 6

what is the relationship between missions and objectives

Answer 6

objectives turn the overall aims of a business into specific goals that must be met

Question 7

why do businesses set objectives

Answer 7

coordination between deparments
motivating for employees
useful in decision making
managers can compare performances with ibjectives to measure success of the business

Question 8

profit objectives

Answer 8

businesses making a loss might aim to become profitable
established businesses might want to increase their profits

Question 9

how can profit objectives be achieved

Answer 9

by setting functional objectives such as minimising costs or to increase sales

Question 10

growth objectives

Answer 10

many businesses aim to grow, the larger a business grows the more able it is to use its position in the market to earn higher profits

Question 11

what can growth objectives be based on

Answer 11

increasing revenue
market share
expansion of a business

Question 12

survival objectuves

Answer 12

survival objectives just means objectives that enable a business to continue trading rather than running out of money
it becomes a key objective during periods of strong competition or recession

Question 13

cash flow

Answer 13

cash flow is money that moves in and out of a business over a set period of time

Question 14

why do businesses set cash flow objectives

Answer 14

to improve their cash flow
increasing cash flow gives company greater chance of survival

Question 15

social objectives

Answer 15

relate to benefiting society or people in need

Question 16

ethical objectives

Answer 16

based on moral principles about how businesses treat people and the environment

Question 17

non profit organisations

Answer 17

charities or social enterprises, work to achieve social or ethical objectives

Question 18

revenue formula

Answer 18

selling price per unit x quantity of units sold

Question 19

revenue def

Answer 19

value of sales, referred to as turnover, amount of money generated by sales

Question 20

fixed costs

Answer 20

dont change with output

Question 21

examples of fixed costs

Answer 21

rent, business rates, basic salaries, cost of new machinery

Question 22

variable costs

Answer 22

rise and fall as output changes

Question 23

variable costs formula

Answer 23

total variabe costs = v.c per unit x no. of units sold

Question 24

total costs

Answer 24

fixed costs + variable costs

Question 25

profit formula

Answer 25

total revenue - total costs

Question 26

profit and short and long term

Answer 26

shareholders often want SHORT term reword but in the long term it is better for business to hold on to profit and reinvest it into future projects

Question 27

importance of profit

Answer 27

a form of motivation
good source of finance, does not need to pay interest like loans or paid back
can be used to attract investors

Question 28

what might increase demand of shares

Answer 28

performance of the company - better dividend payments , increase in demand
speculation and rumour of new product launches
low share price
low interest rates
strong economy

Question 29

what might decrease demand / increase supply

Answer 29

low profits
high share price
weak eonomy